The acquired assets include Thread’s source code and algorithms.
M&S said the acquisition will allow it to integrate the proprietary technology into its own digital platform to increase personalisation and improve the customer experience.
The retailer said that the personalisation capabilities will extend to all its clothing products on M&S.com, including third-party brand partners.
The financial terms of the deal have not been disclosed.
M&S co-CEO Katie Bickerstaffe said: “The acquisition of Thread is the perfect example of a ‘buy not build’ approach – enabling us to accelerate our personalisation strategy by integrating the market-leading tech on M&S.com in under 12 months.
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“We have been working hard to deliver better, more stylish ranges and this algorithm will also put more of our great products in front of the customer, while further unlocking the potential of our third-party brand strategy, by adding outfit-completing product ideas.
“We already know the incremental value personalisation can bring and we anticipate that personalisation will generate more than £100m of annualised incremental revenue for the business.”
Thread CEO and co-founder Kieran O’Neill is due to join M&S as its Head of Product this month.
O’Neill said: “We have worked for the past ten years on building the most advanced AI personalisation for online fashion, proven to increase customer conversion and repeat orders.
“We’re so excited to join forces with M&S; through their infrastructure and support, we’re able to take our market-leading technology to the next level, providing a personalised and unique shopping experience for their 30 million customers.”
M&S said it expects 20-25% of all its digital interactions to be personalised this year.
In July this year, the company acquired logistics provider Gist in an effort to expedite the transformation of its food supply chain network.